Returning to reality, investors are bidding up Spectrum shares in anticipation of the company's second-quarter earnings in the middle of August. Shrotriya has already said publicly to expect "record" revenue for the June quarter, fueled once again by Fusilev colon cancer drug sales because generic leucovorin -- Fusilev's competition -- is still in short supply in the U.S.
None of this should be a surprise to anyone. The leucovorin shortage is only just now letting up with Teva (TEVA) and Bedford Labs beginning to replenish supplies. This benefited Spectrum with Fusilev largely the only option in the colon cancer market for the second quarter, just like it was in the first quarter.
Spectrum reported first-quarter Fusilev sales of $34.6 million and total revenue of $44 million. There's no reason to think second-quarter sales will be lower. If anything, Spectrum needs to record a sequential gain in Fusilev sales and total revenue for the second quarter.
I fully expect Spectrum to "pre-announce" second-quarter earnings later this month or in early August, just like the company did in the first quarter. I'm not the only one anticipating this transparent stock-promotion scheme, judging by the recent ramp in the stock price. [By the way, "real" earnings pre-announcements are issued right before or at the quarter's end, not two or three weeks later. Spectrum operates from a different playbook.]The current analysts' consensus for the second quarter has Spectrum earning 15 cents a share on total revenue of $37.25 million, which is lower than first-quarter revenue, thereby totally ignoring Shrotriya's statement about expecting "record" revenues in the second quarter. Lazy analysts. Investors better hope Spectrum does as well in the second quarter as Shrotriya has promised because the company faces significant headwinds once leucovorin is readily available, giving U.S. doctors a cheaper and equally effective alternative to Fusilev. More tweets. @gregtucker21 asks, "PFS events happening later is a good sign for cabo and EXEL, yes?" Yes, maybe. No, maybe. On Wednesday, Exelixis (EXEL) said it expected a three-month delay in reporting top-line results from a phase III study of cabozantinib in medullary thyroid cancer. Delaying the announcement of results until September-October is necessary because progression-free survival events are not coming as fast as previously expected, Exelixis said. Optimists will assume that the delay in PFS events is being caused by cabozantinib patients performing better than expected, thereby increasing the odds that the study comes out positive.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV